In February, Maine became the twelfth State to pass legislation that allows consumers to freeze their credit information. This program has been floating under the radar for quite some time and I think that if more consumers were aware of it, they would be flocking in droves to sign up.

I know that I wrote eight States and reference Maine becoming the twelfth. There is a reason for this. But first, let me explain about the program. OK fine. For those of you that are impatient, 8 States allow any consumer to participate in freezing their account. The other 4 States and potentially on a National level, you must be a victim of identity theft before you can protect yourself in the future.

California was the first State to pass this type of law back in 2003. The vast majority of Californians have not signed on because they don’t know about it.

Here is the reason behind the law and how it works:

Nearly 10 million Americans fall victim each year to identity theft. Current statistics show that a victim will spend an average of 330 hours resolving problems as a result of identity theft and paid between $851 and $1378 in out of pocket expenses (excluding a median of $4000 per victim in lost wages in 2004).

Identity theft also costs U.S. …continue reading the article titled Freeze your credit, well in eight States anyway…….

Dear Mr. Smith, thank you for your response to my offer. You are approved and here is your money! Oh yah, here is what you agreed to by accepting such a generous offer made by me and my distinguished associates.

1. You can’t sue me or be included in any class action law suit against me.

2. If you miss a payment to someone else that you owe money to, even if you’ve made all of your payments to me on time, I can charge you a higher interest rate for that.

3. I can change the terms of our agreement, anytime that I want to.

4. If you pay back all the money that you owe me, I can charge you an additional fee for that.

5. If you pay me back and you continue to not owe me money anymore, I can charge you a fee for that.

Being a “Shylock” with these terms and conditions….Illegal

Being a Credit Card company with these terms and conditions and having Congress in your back pocket….Priceless

Plain and simple. Over the past 15 years that I have been in the debt and credit industry, I have read countless articles and have met with thousands of people effected by the credit card industry that I am litterally sick and tired it. The credit card industry has been set up to take advantage of uneducated people who have been barraged day after day with ads and offers telling them that without credit, they can’t live like they should be. “Life takes Visa. You live life, we’ll help you” or some moronic statement like that I keep seeing while watching this year’s Olympics. Actually, I get to watch about 10 minutes of Olympic coverage and get to spend the next 5 minutes watching stupid pitches like this.

In this article, I am going to go over some real facts that are in these credit card company contracts and hopefully someone out there will see that this is one of the most underhanded, unregulated, profit mongering businesses out there today.

Here is some “did you know” that hopefully get’s you as angry as I am. Now on a positive note, so we don’t hurt some people’s feelings out there, credit cards are a tool that if used correctly can give you some advantages. Yah, about 5% of the American population falls into that category.

1. Chase Manhattan Bank’s cardholder agreement plainly and clearly makes you agree to give up your right to sue them: “the cardholder cannot take the issuer to court or be included in a class-action suit against the company.”

Wow, the tobacco companies should have had these lawyers on their team…Hmm, let’s see. Sorry Mr. Jones, it clearly states on the underside of the cigarette pack that you purchased, in size 3 font: “By purchasing these cigarettes, you agree that you cannot take the manufacturer of these cigarettes to court or be included in a class-action suit against the company.” I guess that was their big mistake. The warning label only states that you could die, it didn’t say anything about not being able to sue them….

2. Banks and credit card issuers spent millions, yes millions, of dollars lobbying Congress …continue reading the article titled Credit Card Companies are “Shylocks”

Consumer Credit Counseling companies are not always what they advertise to be. Be sure to check out the company and all of your options before enrolling into any type of Credit Counseling Service.

A Massachusetts credit counseling agency and its two owners must pay $4.2 million in penalties and consumer restitution to settle allegations that it misled thousands of consumers and funneled millions of dollars to related for-profit companies.

The consent judgment resolves a lawsuit filed by Massachusetts Attorney General Tom Reilly in April 2004. The suit charged that owners John and Richard Puccio violated Massachusetts charities laws by using Cambridge Credit Counseling to funnel millions of dollars to for-profit companies that they also owned.

The state also alleges that the company violated consumer protection laws by misleading thousands of consumers about the benefits of credit counseling offered by Cambridge Credit.

Under the consent judgment, both Cambridge Credit and the Puccio brothers will pay civil penalties and restitution to consumers.
The Puccios will pay a total of $2 million to the Commonwealth - including a $500,000 civil penalty, $500,000 restitution to consumers, and an additional $1 million in disgorgement of ill gotten gains from the charity.

Cambridge will pay $2.2 million — a $500,000 civil penalty and $1.7 million in restitution to consumers. The Puccios also are permanently barred from working with Cambridge, contracting with the charity, or receiving any money from the charity.

“What is clear is that the owners set up this charity primarily to enrich themselves …continue reading the article titled Non-For-Profit, not always the case

The truth of the matter is that if you keep doing the same things over and over and expect different results, you’ll set yourself up for failure. If you’re up to your eyeballs in debt and keep using your credit cards, nothing will change. I’m a strong believer that if you change your mind about your finances, you’ll change your financial status. What does all this mean?
It means that if you’re really committed to getting out of debt once and for all, you’re going to have to change your money habits - specifically, how you spend and save. So many people find any excuse to spend money to numb any pain they may be feeling in their lives. Relationship splits, job losses, whatever situation has brought stress and anxiety can also bring the “urge to splurge”, unfortunately to your own detriment.
So it’s one thing for me to say this is how it is…what’s the solution?

1. Fess up to the fact that there’s NO quick fix. Getting out of debt will take time and require that you exercise patience, discipline, sacrifice and commitment!
2. Understanding that doing the same things and expecting different results is the definition of insanity - look at what negative habits around money you have that need to change? Better question…are you WILLING do do things differently?
3. Face reality. What I mean by this is it’s imperative that you tell the truth about exactly how much debt you have to pay off. It’s easy to want to be vague - when you’re specific and clear, you’ll see the exact numbers on what you owe and it may not make you feel great. Believe me though, once you get a handle on exactly where you’re at, you’ll feel a sense of empowerment like you never have before!
4. Make a plan and Work that plan! Once you’ve decided that you’re ready and willing to make some positive changes and you’ve listed exactly everything you owe and all the money you have coming in, you’re ready to make anaction plan for getting out of debt. Restructure your life to minimize the triggers that cause you to spend money unecessarily and pick a buddy who’ll support your goal of being debt free.
5. The best way to lose weight is to go on a diet or a sensible eating plan. It’s no different for getting out of debt. When you’ve made up your mind to go on a debt free diet, you’re going to have to track every dollar you spend so it can go towards every dollar of debt you owe. Once you see your debt go down, you’ll be invigorated to keep the momentum going.

I’m going to focus several articles specificallyl on Saving, Budgeting and Controlling Spending. I”m bound and determined to help anyone who’ll listen get out of debt once and for all.

Talk to you soon,

Dee Dee Sung
Founder, Debt Free Divas, Inc.
From Self Worth to Net Worth
www.debtfreediva.com

NACS President Blasts Credit-Card Fees

ALEXANDRIA, Va. — Henry O. Armour, president and CEO of the National Association of Convenience Stores, testified yesterday before the House Energy and Commerce Committee’s Subcommittee on Commerce, Trade and Consumer Protection on the industry’s long struggle with credit-card interchange fees, reported NACSOnline.

“Interchange fees are levied in a market that is broken and something must be done to fix it,” Armour said. “This hearing is an important step toward informing Congress and the public about the impact that high interchange rates have on U.S. consumers. There has not been nearly enough information and discussion about these fees in the past, and we applaud you for your willingness to examine them.”

NACS was invited to testify as a result of its testimony in September 2005 before the full Committee regarding gasoline prices and the increasing amount of money that credit-card companies take out of every gallon of gasoline purchased, reported NACSOnline.

Armour outlined in the report four fundamental problems with the current interchange market. First, he noted that due to the market power of the card associations, retailers have no choice about whether they accept cards. Second, the card associations exploit their market power by driving up fees and by veiling these fees and their rules in secrecy. Third, these fees are bad for consumers — particularly some middle- and many lower-income consumers who do not have easy access to credit and debit cards. And fourth, consumers in the United States pay much more for interchange than other comparable countries.

Most consumers have no idea that they pay interchange fees, which are hidden in the price of virtually everything they buy and total an estimated $27 billion annually in the United States, according to NACS. Consumers do not know about these hidden fees because the credit card companies go through great lengths to assure that consumers remain in the dark about these fees, Armour said in the report.

“It’s not just consumers who are left in the dark; Visa and MasterCard refuse to fully disclose their operating rules to retailers,” Armour said. “It is remarkable that they make retailers agree to abide by all of their operating rules in order to be able to accept their cards.”

Ultimately, consumers pay the price. According to NACS, the average American family pays $331 in interchange and related fees every year. And that is true whether or not that family uses credit or debit cards. Because these fees are hidden in the cost of virtually everything consumers buy, even cash-paying consumers ultimately pay for them, according to NACSOnline.

“This results in a nasty, regressive charge,” Armour said. “Consumers with fewer resources whose credit does not allow them to have credit cards or do not have debit cards pay this fee like everyone else — as do consumers with credit cards who pay high interest rates, annual fees and have no rewards or miles programs.”

Getting Divorced and your debt:

I got divorced. My spouse was ordered to pay the credit card debts so I don’t have to: False

You get divorced. As part of the settlement, your (now) ex-spouse was ordered to pay the debts (car or mortgage note, credit cards, medical bills, etc.). Some divorce lawyers may tell you that your creditors will honor the divorce decree and relieve you of the obligations. I am sorry. They are wrong. Some creditors may. Most often, they will pursue you as well if the debt remains unpaid. Further, they will report the negatives on your credit report. This will hurt your FICO score and future ability to obtain credit for years to come. In addition, you could still be sued by your creditor(s) for …continue reading the article titled Demystifying the Myths about credit:

Over the next several publications, I am going to take a look at some of the most common misconceptions about credit and debt. Hope it helps….

The amount of money you make determines how good your credit is: False

An impressive salary doesn’t translate into a good credit report or good credit score. It’s true that a lender will look at the amount of money you make to determine your ability to make your monthly payments on the loan but, that’s as far as it goes.

Your credit worthiness is based upon your credit history, not your salary. Creditors use a FICO score to determine if you are qualified to get a loan, and at what interest rate that loan needs to be paid back at.

FICO scores range from 400 to 850 points. The higher your score, …continue reading the article titled Demystifying the Myths about credit:

One of my Debt Free Divas community members just sent this question in about her finances - hope you find it helpful!

Q. I’m determined to get my finances on track this year and would welcome a few pointers on where to start. There’s so much information out there that it becomes confusing. I’m tired of feeling like my debts are overwhelming and I have no money available at the end of each month. What’s bothering me the most is that I don’t really know where my money’s going.

A. Congratulations on your commitment to get your finances in order! The cynics believe that New Year’s resolutions are meant to be broken but it doesn’t have to be that way. The truth is that it’s important to have a plan of action in place that’s simple and easy to follow. Remember, it’s the baby steps that lead to giant results. Okay, let’s talk about these 5 STEPS to a financially healthy new year!

• Set realistic goals – unattainable goals are a surefire way to set you up for failure. I emphasize the word “realistic” as you will build your confidence when you start to see positive results.
• Track your spending – this may seem tedious but it’s the only way you’ll be able to see where you precious dollars are really going. Many people like to remain vague so they don’t have to confess to the miscellaneous expenditures that are eating up their hard earned cash and preventing them from reaching their goals and dreams.
• Envelop system for budgeting – this is all about getting back to basics. Create an envelope for every category within your budget and when you receive your paycheck, allocate a percentage into each category. Generations before us successfully used this system and, in my opinion, it’s still one of the most powerful ways to create and stick to a budget. Believe me, it’s empowering to know where your money’s being spent and it will allow you to make necessary adjustments over time. More so, once the cash in a particular envelope has been depleted, you know you’ve hit your spending limit. As they say, proof is in the pudding!
• Progress not perfection – it’s all too tempting to set lofty, unattainable goals. Unfortunately, that usually results in taking your commitment to that goal from excitment to overwhelm and defeat. I like to remind people that any journey is more about making progress versus striving for perfection. You will find that focusing on progress will take a lot of pressure off of the task at hand. It’s also important that you have some fun and be willing to laugh as you learn!
• Save before you spend – consistently allocating a portion from each paycheck into a savings account (no matter how small the amount) will go a long way to build your money confidence and give you a sense of freedom. Usually, the #1 excuse for not doing this is that there isn’t enough money from each paycheck to save. This is where the envelope and tracking systems come into play as they will both allow you to determine where you’re spending your money that you could cut back on. It doesn’t matter what amount you start with - $25, $50 per month – what matters most is that you start. As you see your savings account balance start to grow, you’ll be inspired to find ways to free up more cash to save.

Embarking on these steps requires you to make a commitment to yourself. You might also consider finding a friend who wants to take these steps with you. The best way to creating a healthy relationship with money is to connect with other like minded people who are on the same journey. Although there will be discomfort along the way, believe me, the rewards will be many!

For answers to your questions about credit, debt elimination methods and smart money management - please email me at coach@debtfreediva.com

Happy 2006!

Dee Dee Sung
Founder, Debt Free Divas, Inc.
From Self Worth to Net Worth
www.debtfreediva.com
coach@debtfreediva.com

Initially, it was Frank McNamara of New York’s Hamilton Credit Corporation that come up with the idea of giving affluent businessmen a convenient way to charge some of their business related expenses.

In 1950, he issued the original Diners Club card. It was made of pasteboard with the customer’s name on one side and a list of twenty-seven restaurants that accepted it on the other. In 1955 the pasteboard card was replaced by one fabricated from plastic.

American Express began issuing cards in 1958 followed by The BankAmericard, issued by the Bank of America. Soon, smaller banks joined the BankAmericard system. In 1977 the card underwent a name change and became …continue reading the article titled Credit Cards, debt of a Nation

It’s that time of year again; soon you will have many sources popping up suggesting ways to spend your upcoming tax refund. Let’s put this in perspective.

First, tax refunds are not “found” money, but a return of money YOU overpaid into the tax system! The average refund check is somewhere around $2,200 and $2,400.

One of the first things that you should do, if you had no abnormal deductions for the year and anticipate that those deductions will remain the same in the future, is to change your withholdings so you don’t overpay in 2006. I have no idea why you would want to give someone (even the government) money to hold onto for a year with no interest being made off of that money.

An easy way to calculate this adjustment is to take your refund amount, divide it by twelve and adjust your withholdings accordingly. Your company’s payroll department can assist you in this process. By doing this, it could give you several hundred dollars …continue reading the article titled Tax refunds a good way to get out of debt